WA labour costs high despite slowdown

Labour costs in Western Australia's mining industry remain high, despite commodity price falls and a slow down in the sector, the world's second biggest gold miner says.

US-based giant Newmont Mining, which operates the large Boddington gold mine south of Perth, says it is planning for annual pay rises of five to seven per cent across its global portfolio amid continued upward pressure on labour costs in regions such as WA.

Newmont's executive vice president Russell Ball said cost pressures in WA had eased a touch and a correction could not be discounted.

"Clearly we've seen a pullback there in Western Australia, particularly as it was probably the hottest region around the world," Mr Ball said.

"They have the most opportunity to come back to where the rest of the field is.

"We have not seen this slow down impact... yet."

He said big questions remained around China, Europe and the global macro picture.

Newmont last Friday downgraded its production forecast for Boddington, its prime Australian asset, and said problems at its Tanami mine in the Northern Territory had been a drag on its third-quarter profit result.

That came after Newmont Asia Pacific in October reduced its Australian workforce by 50 positions as part of a cost review.

Labour costs account for around half the company's costs.

Mr Ball said there was still upward pressure on total labour costs but at "slightly lower rates" than over the past four or five years.

"I don't believe you'll see labour rates stay flat or come down frankly in this environment," he said.

The company has planned for labour cost increases of five to seven per cent across its portfolio.

It also says the federal government's new carbon tax will account for cash costs of around $US40 ($A38.78) an ounce at Boddington.

"We also have to keep an eye on what happens with the Australian political situation because the opposition party has a different view on that," Newmont chief operating officer Gary Goldberg said.